Long-Term Care 101

It’s getting harder to avoid the topic of long-term care (LTC) these days. Almost everyone knows someone who has received long-term care services, along with a story about its unexpected high cost. About 70% 1. of people will need some form of long term care at some point in their lives. This has caused concern over what our own long-term care needs might be and for good reasons.

First, we’re getting older. According to the U.S. Census Bureau, by 2030 the number of Americans aged 65 and older will more than double to 71 million, comprising approximately 20 percent of the U.S. population.

Second, with improvements in healthcare, some of the common acute illnesses, once resulting in death, have evolved into chronic conditions, thus necessitating the need for long term care.

No doubt, as the baby boom generation continues to age and live longer, the system may strain to deliver the needed services. As demand outstrips supply, costs can only be expected to rise.

What Is LTC?

Long-term care encompasses a range of services for individuals suffering from chronic conditions; support is provided to meet your health or personal care needs over a long period of time. Most long term care is not medical care; rather it is custodial care, ie. requiring assistance with Activities of Daily Living (“ADLs”) and other every day household tasks.


Bathing – washing oneself by sponge bath or in the bathtub or shower.
Dressing – putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.
Toileting – moving oneself to and from the bathroom, arranging clothes, cleansing self.
Transferring – moving into and out of a bed, chair or wheelchair.
Eating – getting food and drink from a container into the body for nourishment.
Caring for Incontinence – inability to maintain control of bowel and bladder functions as well as the inability to perform associated personal hygiene such as caring for a catheter or colostomy bag.

How Much Will It Cost?

According to the US Department of Health and Human Services, in 2010 the national average cost in an assisted living community in is $3,293 per month while the average cost of a private nursing home room is $6,965 per month, or $83,580 annually.*

Many mistakenly believe that Medicare or Medicaid will pay for our long term care needs. However, Medicare is essentially health insurance for those over age 65. It is not designed to provide long term care benefits. Medicaid, on the other hand will provide long term care benefits. However to qualify you must deplete your assets. Only then would you become eligible to receive long term care Medicaid benefits, however, your options are fewer.

Some believe they can rely on their own personal resources to pay for their long-term care needs. However, many underestimate the cost and can end up using savings or assets they have spent a lifetime accumulating and which have been earmarked for retirement. If the individual has other dependents or is married this may place those individuals at risk.

Another Option: Long-Term Care Insurance

Instead of depleting their assets, relying on the government for help, or burdening loved ones, many are turning to long-term care insurance to help cover these costs if a need arises. This type of policy covers services such as nursing home, assisted living, home care, and adult day care.

If you believe you’re too young to begin thinking about long-term care, consider that many people who require long-term care are working-age adults between the ages of 18 and 64. Plus, the premiums for long-term insurance are likely to be much lower the younger you are when you purchase the policy.

A licensed financial services professional can help you determine whether you need long-term care insurance, how much, and how to pay for it.

Please Note: Availability of long-term care insurance varies by carrier and state.